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Keywords Studios PLC

Keywords buys Japanese HTML5 specialist

"We are thrilled to welcome Guillaume and the Wizcorp team to join our fast-growing operations in Tokyo where we already employ 300 people," said Christopher Kennedy, Keywords' regional managing director for Asia

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Japan is one of the world's most significant game development hubs and has a long history in this industry

Keywords Studios PLC (LON:KWD), the technical services provider to the global video games industry, has acquired Wizcorp for 120mln Japanese yen in cash.

Based in Tokyo, Wizcorp develops games on behalf of others, mainly for mobile devices. It has particular expertise in HTML5 – a hypertext mark-up language (HTML) used to create web pages - and other mobile technologies.

READ Keywords Studios profits jump 65% as acquisitions boost earnings in 2018

Wizcorp, which has annual revenues of around 310mln yen, was established in 2008 and has provided game development as a service to a wide variety of Japanese publishers and developers such as LINE, Square Enix, Avex, Yahoo Japan, and Bandai Namco, as well as undertaking game development for its parent company, Ankama.

Keywords is acquiring the company from Ankama SAS and Silicon Studio Corporation.

“Japan is one of the world's most significant game development hubs and has a long history in this industry. Keywords is excited at the opportunities Wizcorp will bring the group and its clients in the Japanese market as it becomes the latest member of our global Engineering service line,” said Christopher Kennedy, Keywords' regional managing director for Asia.

“Wizcorp's HTML5 expertise is a valuable extension to our console, mobile and PC games development skills, which is particularly interesting in the context of Snap's recent launch of its HTML5 based gaming platform,” Kennedy said.

In a note to clients, analysts at Peel Hunt pointed out that the Wizcorp annual revenue figure "implies revenue per employee of €71k, compared to KWS as a whole on €48k."

"However," the analysts added, "under its current ownership structure, it hasn’t been run as a profit centre – so this may reduce over time as it focuses more on costs. Keywords believes that under its ownership, it would be able to shift the business towards margins similar to its current underlying Engineering Service line."

Peel Hunt reiterated a 'hold' rating and 1,254p target price on Keyword shares, which in afternoon trading held steady at 1,470p.

 -- Adds analyst comment, share price --

Quick facts: Keywords Studios PLC

Price: £12.47

Market: AIM
Market Cap: £811.53 m
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